A law firm has been fined more than £25,000 and one of its salaried partners £3,500 for failing to comply with anti-money laundering regulations.
WGS Solicitors, based in Paddington, London, admitted the breaches and was also ordered to pay £18,000 costs in an agreed outcome. The Solicitors Disciplinary Tribunal found the firm had ‘failed to have proper procedures in place in order to ensure its compliance with its regulatory obligations’.
The firm admitted that between 3 May 2018 and 15 August 2020, it caused or allowed money to be received to and paid from the firm’s client account in circumstances other than in respect of an underlying legal transaction being undertaken by the firm, or in respect of the delivery of normal regulated services by the firm. Between 26 June 2017 and 17 March 2021 it failed, adequately or at all, to apply customer due diligence; apply enhanced customer due diligence and/or enhanced ongoing monitoring; conduct ongoing monitoring of its business relationships with such entities; and to conduct a risk assessment of the client and/or matter.
‘[The firm] had direct control of those failings, which had continued over a significant period of time. It had allowed its client account to be used as a banking facility in circumstances where it had failed to ensure that proper checks were in place to militate against the risks of money laundering,’ the tribunal said.
In non-agreed mitigation, the firm said its ‘failure to appreciate the nature and extent of the 2017 MLRs’ more extensive requirements is at the heart of this case and the admissions made’.
A fine of £25,258, taking into account the firm’s turnover, was agreed to be ‘reasonable and proportionate’.
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Bridget Catherine Miller was a salaried partner at the firm at the time of the alleged failures with primary responsibility for Person B1. She was alleged, between 26 June 2017 and 1 November 2020, to have ‘materially contributed’ to WGS’ anti-money laundering failures. She admitted the allegation on the basis that she ‘failed to scrutinise the source of funds for transactions involving Person B1 and failed to properly assess the risk posed by each transaction’.
Person B1 first instructed WGS Solicitors in 1997. From 2011 onwards, Miller, was the fee-earner on B1’s matters. She did not act for Person B1 after November 2020.
Miller did not accept she had materially contributed to the firm’s failure to apply enhanced customer due diligence measures. That allegation was withdrawn.
In non-agreed mitigation Miller, admitted in 1992, said the breach occurred ‘not as a result of any intention or recklessness…but a failure to appreciate her duties and obligations under the legislation’.
The SDT said: ‘The tribunal found that Ms Miller, as the solicitor with conduct of the matters for [Person] B1, should have ensured that the necessary [customer due diligence] information was obtained. As an experienced solicitor and partner in the firm, Ms Miller should have been aware of the relevant Rules and Principles.’
Miller was ordered to pay a fine of £3,500 and £6,500 costs.
